Utilities Must Bridge the Divide Between IT and OT to Realize the Benefits of the Smart Grid

Uncertainty as to how new IT systems should be incorporated into network operations continues to slow the advance of smart grid technologies. Though the need to support smart meters has already driven significant change in the utility IT landscape, the evolution of the smart grid from the initial deployment of smart meters to a dynamic, intelligent network supporting bidirectional communications between utilities and customers is only just beginning. According to a recent report from Pike Research, a part of Navigant’s Energy Practice, the need to define and deploy new IT systems to support the smart grid is driving greater collaboration between the information technology (IT) and operational technology (OT) sides of the business.

Utilities are taking varied approaches to solving this challenge, says research director Eric Woods. “In some utilities, the CIO is driving the planning process to achieve an architectural view of IT and OT,” Woods adds. “Others are allowing operational teams to take the lead in defining requirements, with the IT organization adopting the system provider role. However, most utilities are focused on defining the new functions and processes required for smart grids, finding ways to work together to achieve this and worrying later about organizational structures.”

The total smart grid software and related IT services market will reach $4.3 billion by the end of 2012, the study finds, and grow to over $8.6 billion by 2017. North America is leading the initial market in many smart grid IT innovations, but the European and Asia Pacific markets will become more significant over the next five years. Europe’s drive toward its 20-20-20 carbon-reduction targets is focusing innovation on the issues around renewable integration, energy efficiency, and energy security. In Asia Pacific, the scale of Chinese investments in grid infrastructure is yet to be matched by an impact on the IT market, but China will become a more active player in the market in coming years, according to the report.

The report, “Smart Grid IT Systems,” examines the state of smart grid IT and provides a model for understanding how smart grid IT is evolving. The report analyzes the relationship between key elements of the smart grid IT landscape, including MDM, CIS, DMS and data analytics and looks at application areas such as outage management and asset management. Market forecasts for smart grid software and related services, segmented by application and world region, are provided through 2017 and key industry players are profiled in depth. An Executive Summary of the report is available for free download on the Pike Research website.

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